July 23, 2024

Western Slope hospitals contribute hundreds of millions of dollars to the local, and, at times, rural economies each year, according to two separate reports commissioned by the hospitals themselves.

Intermountain Health’s St. Mary’s Regional Hospital in Grand Junction commissioned Colorado Mesa University Economics Professor Nathan Perry to determine the direct, indirect and induced impact its operations had on the Mesa County economy throughout 2022.

According to the report, direct effects are the immediate impact of jobs, wages and expenditures; indirect effects are the impact of local spending on suppliers; and induced effects are the impacts made by employees putting their wages back into the local economy.

The other report was commissioned by the Western Healthcare Alliance, a coalition of medical providers mostly located in Colorado and Utah that provides opportunities for collaborations and partnerships. This study was conducted by the Business Research Division at the University of Colorado-Boulder Leeds School of Business and focused on the economic contribution of six independent hospitals to Colorado between 2019 and 2022. The study also specified how much of the overall impact was in rural economies.


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“Most people don’t necessarily understand that when you have a hospital in a community, it provides health care, but it also provides jobs, and it provides an economic engine for that community that goes beyond just the X-ray that you’ve received,” said Angelina Salazar, chief executive officer of the alliance, which includes such providers as Community Hospital and St. Mary’s.

The hospitals analyzed in the alliance study mostly service rural regions across Colorado, including in Mesa, Montrose, La Plata, Alamosa, Eagle and Garfield counties.







Community Hospital Career Day

Scott Crabtree

In this file photo from March 2023, School District 51 High School Students learn about careers in the health care industry at Community Hospital. In a recent report, the hospital makes a significant impact on the regional economy.




Joe Minissale, the interim chief financial officer at Montrose Regional Health, one of the six selected providers, said this rural focus demonstrates how the health care industry is especially influential in rural, developing areas.

“When you bring in good, high-paying, educated positions, it just keeps flowing down and down,” Minnissale said. “You need more buildings, more equipment, more security, more housing and schools and more teachers, public works, restaurant and service industry jobs, et cetera.”

IMPACT SUMMARY

According to the St. Mary’s report, the hospital directly contributed nearly $277 million to Mesa County’s gross domestic product throughout 2022. Including indirect and induced effects, its GDP contribution totaled over $443 million.

Another emphasis of the report was that the hospital directly employed 2,739 people in 2022, resulting in a pay-out of just under $265 million in wages, health insurance and fringe benefits. With consideration of wages resulting from capital expenditures as well as indirect and induced effect wages, the hospital spent more than $365 million, which is just under 8% of the total wages in the county. The report also said that (including indirect and induced) the hospital generated more than $105 million in tax revenue.

The alliance study, meanwhile, reported that the six area hospitals contributed a combined total of $1 billion (including indirect and induced) to the state’s GDP in 2022. This study also reported that over 6,000 Coloradans were directly employed across the surveyed hospitals in 2022, which generated around $600 million in direct wages that year and another $200 million via indirect wages. Of the more than 6,000 Coloradans directly employed by the six alliance providers in 2022, Community Hospital employed more than 1,200 of them.

While the scope of this study was the entire state, rather than St. Mary’s focus on Mesa County, the alliance report does note that more than 93% of the total economic impact was generated in rural areas. The total GDP contribution of all the surveyed hospitals to rural counties in 2022 was just under $976 million.

These studies do not include Family Health West nor the Grand Junction Veterans Administration Medical Center, though they certainly contribute to the economic pillar that is the county’s health care industry.

According to the Family Health West Communications Manager Heather Benjamin, the hospital is Fruita’s largest employer with 599 employees and a $40 million annual payroll in 2023. Benjamin added that while their economic impact and its benefits on the county are apparent, the hospital primarily focuses on community impact through personalized care.

“We aren’t looking to compete with our bigger neighbors for costly clinics like labor and delivery or cardiac care,” Benjamin said. “Our focus remains on rehabilitation and serving the greater community with personalized care.”

The Grand Junction VA administration could not provide many specifics on economic impact, but a representative said that it employs over 900 people.

SEPARATE STUDIES SIGNIFICANCE

Bryan Johnson, president of St. Mary’s and the Western Colorado Market for Intermountain Health, said one benefit of their study is that it addresses concerns about the recent Intermountain Health merger potentially resulting in a loss of local resources to the system’s new headquarters in Salt Lake City.

“We are a not-for-profit entity, which always gets challenged (with the question) why don’t we pay taxes,” Johnson said. “Well, we don’t pay taxes because we more than exceed our taxable liability based on our community benefit. On top of that, there’s $105 million worth of taxes that this community receives just by St. Mary’s being here.”

He added that their study was motivated by a desire to demonstrate how much they benefit the local community and determine how much of the health care industry’s impacts can be directly connected to St. Mary’s.







District 51 students tour hospital

Jeff Aman, Director of Radiation for Community Hospital, with students from Mesa County School District 51 during Career Day at the hospital in March 2023




According to Community Hospital CEO Chris Thomas, both studies shared the intention of illustrating how these hospitals benefit the region, adding that those intentions differ in that Community Hospital and the others in the alliance survey sought to prove their value specifically as independent hospitals.

“We are trying really hard to stay independent because of the values that we think that system brings, but we’re up against consolidations and the different challenges,” Thomas said. “They have very deep pockets in those systems, so how do we compete with those, stay viable and stay independent? We wanted to demonstrate we’re making a difference if you look at the payroll, the investments and what these hospitals are doing for our communities.”

“I’m not talking about the smoke and mirrors with community benefits, we have never been a really strong financial organization — we get by and we’ve done well – but we don’t have lots of money in the bank because we usually just reinvest it,” Thomas said.


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PUBLIC PERCEPTION

Despite some differences in the motivations behind these two studies, Salazar said that both impact reports serve the shared purposes of demonstrating the value of hospitals and shifting away from the current narrative that hospitals are nothing but giant profit centers.

Salazar added that regardless of whether a hospital is independent or part of a system, they all have a critical role in the overall industry.

According to Perry, the healthcare industry across Colorado is an important influence, as it is not subject to recessionary cycles like the majority of other industries. Stabilizing industries such as these are especially impactful in rural regions where there might not be as many consistent, high-paying jobs as there are in urban areas.

“Health care is integrally important to the physical health and the economic health of these communities,” said Brian Lewandowski, executive director of CU’s Business Research Division. “It’s important not only for the young families, but for the aging populations in these communities. It’s an intangible benefit of having good health care within some of these communities.”

The full St. Mary’s Economic Impact report can be found here. The full alliance Economic Impact report can be found here.

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